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Abbott (ABT) Beats on Q1 Earnings, Suspends '20 Guidance
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Abbott Laboratories (ABT - Free Report) reported first-quarter 2020 adjusted earnings from continuing operations of 65 cents per share, exceeding the Zacks Consensus Estimate by 18.2%. Meanwhile, the adjusted figure improved 3.2% from the prior-year quarter.
The quarter’s adjustments include certain non-recurring expenses primarily associated with acquisitions and restructuring actions, among others.
However, the reported earnings from continuing operations came in at 30 cents, reflecting a 21.1% decline, year on year.
First-quarter worldwide sales of $7.73 billion were up 2.5%, year over year, on a reported basis. The top-line figure also surpassed the Zacks Consensus Estimate by 8.4%.
On an organic basis (adjusting for the impact of foreign exchange), sales increased 4.3% year over year in the reported quarter.
Quarter in Detail
Abbott operates through four segments — Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
Abbott Laboratories Price, Consensus and EPS Surprise
In the first quarter, EPD sales rose 5.2%, on a reported basis (improved 9.3% on an organic basis), to $1.04 billion. Organic sales in the key emerging markets improved 13.1%, year over year, on a reported basis. This resulted from strong growth across a number of geographies, including Russia, Brazil, and several countries across Latin America and Southeast Asia.
Medical Devices business sales increased 1.4% on a reported basis to $2.94 billion. On an organic basis, sales grew 2.9%. Growth in cardiovascular and neuromodulation businesses was negatively impacted by the reduced procedure volumes due to the coronavirus pandemic. The company is concerned about the ongoing scenario in healthcare and expects these products to return to their usual growth trajectory when normalcy resumes.
Within Diabetes Care, the company registered 35.6% organic growth banking on the solid worldwide adoption of FreeStyle Libre. This device alone registered global sales of more than $600 million in the quarter, marking a surge of 62.5% on an organic basis.
Nutrition sales were up 6.3% year over year, on a reported basis (up 7.3% on an organic basis), to $1.90 billion. Pediatric Nutrition sales improved 6.4%, on an organic basis. Adult Nutrition sales climbed 8.5%, organically. According to the company, sales benefited from the increased demand in late March owing to the shelter-in-place restrictions related to the coronavirus outbreak.
Diagnostics sales were down 0.8%, year over year, on a reported basis (up 0.7% on an organic basis) to $1.83 billion. Core Laboratory Diagnostics sales declined 4.9% on an organic basis, affected by lower routine testing volumes due to the virus outbreak. However, Molecular Diagnostics jumped 30.3%, on an organic basis. Point of Care Diagnostics sales too improved 2.7%, on an organic basis. Rapid Diagnostics sales improved 5.4%, on an organic basis, in the March-end quarter.
2020 Guidance
The uncertainties regarding the duration and impact of the coronavirus pandemic on the company’s overall business have compelled Abbott to suspend its previously-issued 2020 financial guidance.
Our Take
Abbott exited the first quarter of 2020 with better-than-expected earnings and revenue numbers. Overall, we are optimistic about the firm’s strong and consistent EPD performance organically. Abbott has been riding high on a healthy growth graph within its Diabetes Care business as well. The company has also been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre System.
However, core Laboratory Diagnostics sales were significantly down in the reported quarter affected by lower demand for routine testing in the past few months due to the coronavirus outbreak. Meanwhile, molecular diagnostics and nutrition businesses put up impressive performance during the same time period.
We note that, in March, the company launched two COVID-19 tests — the ID NOW COVID-19 molecular test (the fastest available molecular point-of-care test delivering results within 13 minutes and positive results in five minutes) and the RealTime SARS-CoV-2 molecular test, which runs on Abbott's m2000 RealTime System located in hospitals and reference laboratories.
In April, the company rolled out its third COVID-19 test, which is a serology blood test for the detection of the antibody, IgG, on its lab-based immunoassay testing platforms.
Nevertheless, the company has suspended its full-year view amid coronavirus crisis, which is concerning.
The Zacks Consensus Estimate for Chemed’s first-quarter 2020 revenues is pegged at $523.6 million, suggesting 13.3% growth from the prior-year reported figure. The same for the adjusted earnings per share is anticipated at $3.65, indicating a 25% improvement from the year-ago reported number.
The Zacks Consensus Estimate for DexCom’s first-quarter 2020 revenues is $356.5 million, calling for a 27.1% increase from the year-earlier reported figure. The same for the adjusted earnings per share stands at 10 cents, indicating a 300% surge from the year-ago reported figure.
The Zacks Consensus Estimate for ViewRay’s first-quarter 2020 earnings per share stands at a loss of 20 cents, suggesting a 41.8% improvement from the year-ago period.
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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Abbott (ABT) Beats on Q1 Earnings, Suspends '20 Guidance
Abbott Laboratories (ABT - Free Report) reported first-quarter 2020 adjusted earnings from continuing operations of 65 cents per share, exceeding the Zacks Consensus Estimate by 18.2%. Meanwhile, the adjusted figure improved 3.2% from the prior-year quarter.
The quarter’s adjustments include certain non-recurring expenses primarily associated with acquisitions and restructuring actions, among others.
However, the reported earnings from continuing operations came in at 30 cents, reflecting a 21.1% decline, year on year.
First-quarter worldwide sales of $7.73 billion were up 2.5%, year over year, on a reported basis. The top-line figure also surpassed the Zacks Consensus Estimate by 8.4%.
On an organic basis (adjusting for the impact of foreign exchange), sales increased 4.3% year over year in the reported quarter.
Quarter in Detail
Abbott operates through four segments — Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
Abbott Laboratories Price, Consensus and EPS Surprise
Abbott Laboratories price-consensus-eps-surprise-chart | Abbott Laboratories Quote
In the first quarter, EPD sales rose 5.2%, on a reported basis (improved 9.3% on an organic basis), to $1.04 billion. Organic sales in the key emerging markets improved 13.1%, year over year, on a reported basis. This resulted from strong growth across a number of geographies, including Russia, Brazil, and several countries across Latin America and Southeast Asia.
Medical Devices business sales increased 1.4% on a reported basis to $2.94 billion. On an organic basis, sales grew 2.9%. Growth in cardiovascular and neuromodulation businesses was negatively impacted by the reduced procedure volumes due to the coronavirus pandemic. The company is concerned about the ongoing scenario in healthcare and expects these products to return to their usual growth trajectory when normalcy resumes.
Within Diabetes Care, the company registered 35.6% organic growth banking on the solid worldwide adoption of FreeStyle Libre. This device alone registered global sales of more than $600 million in the quarter, marking a surge of 62.5% on an organic basis.
Nutrition sales were up 6.3% year over year, on a reported basis (up 7.3% on an organic basis), to $1.90 billion. Pediatric Nutrition sales improved 6.4%, on an organic basis. Adult Nutrition sales climbed 8.5%, organically. According to the company, sales benefited from the increased demand in late March owing to the shelter-in-place restrictions related to the coronavirus outbreak.
Diagnostics sales were down 0.8%, year over year, on a reported basis (up 0.7% on an organic basis) to $1.83 billion. Core Laboratory Diagnostics sales declined 4.9% on an organic basis, affected by lower routine testing volumes due to the virus outbreak. However, Molecular Diagnostics jumped 30.3%, on an organic basis. Point of Care Diagnostics sales too improved 2.7%, on an organic basis. Rapid Diagnostics sales improved 5.4%, on an organic basis, in the March-end quarter.
2020 Guidance
The uncertainties regarding the duration and impact of the coronavirus pandemic on the company’s overall business have compelled Abbott to suspend its previously-issued 2020 financial guidance.
Our Take
Abbott exited the first quarter of 2020 with better-than-expected earnings and revenue numbers. Overall, we are optimistic about the firm’s strong and consistent EPD performance organically. Abbott has been riding high on a healthy growth graph within its Diabetes Care business as well. The company has also been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre System.
However, core Laboratory Diagnostics sales were significantly down in the reported quarter affected by lower demand for routine testing in the past few months due to the coronavirus outbreak. Meanwhile, molecular diagnostics and nutrition businesses put up impressive performance during the same time period.
We note that, in March, the company launched two COVID-19 tests — the ID NOW COVID-19 molecular test (the fastest available molecular point-of-care test delivering results within 13 minutes and positive results in five minutes) and the RealTime SARS-CoV-2 molecular test, which runs on Abbott's m2000 RealTime System located in hospitals and reference laboratories.
In April, the company rolled out its third COVID-19 test, which is a serology blood test for the detection of the antibody, IgG, on its lab-based immunoassay testing platforms.
Nevertheless, the company has suspended its full-year view amid coronavirus crisis, which is concerning.
Zacks Rank & Key Picks
Currently, Abbott carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are Chemed Corporation (CHE - Free Report) , DexCom (DXCM - Free Report) and ViewRay, Inc. . While Chemed sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chemed’s first-quarter 2020 revenues is pegged at $523.6 million, suggesting 13.3% growth from the prior-year reported figure. The same for the adjusted earnings per share is anticipated at $3.65, indicating a 25% improvement from the year-ago reported number.
The Zacks Consensus Estimate for DexCom’s first-quarter 2020 revenues is $356.5 million, calling for a 27.1% increase from the year-earlier reported figure. The same for the adjusted earnings per share stands at 10 cents, indicating a 300% surge from the year-ago reported figure.
The Zacks Consensus Estimate for ViewRay’s first-quarter 2020 earnings per share stands at a loss of 20 cents, suggesting a 41.8% improvement from the year-ago period.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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